Share index of Shariah-compliant companies launched in New Delhi
By TwoCircles.net staff reporter,
New Delhi: Islamic banking is gaining popularity all over the world including India. This can be judged by the forecast that investments worth $100 billion will be made globally in this system by 2010.
These estimates were revealed by economists and experts of investment banking in a programme organized for the launching of the India Islamic Index at the India Islamic Cultural Centre in New Delhi yesterday.
The Eastwind India Islamic Index comprising publicly listed companies, which are Shari’ah compliant, was launched to attract Gulf-based investors to such Indian companies.
The CEO of East Wind Capital Advisor, Shailender Kumar pointed out that the reputed banks of the world have started promoting their business through Islamic banking. These banks include HSBC, Dow Jones and other banks and financial institutions. He further said that in India, Reliance, UTI and State Bank of India have also started practicing interest-free system of Islamic banking. This proves that this system is not only viable but also profitable. He said that more than 25% of non-Muslims in Malaysia have invested their money in Islamic banking.
The EW India Islamic Index excludes companies engaged in the alcohol products, conventional financial services like banking and insurance, gambling, hotels, pork-related products and all other businesses which the Shari’ah board considers unethical.
The EW India Islamic Index is a subset of EW All Share Index which has a market capitalization of Rs.5.6 trillion, which is 99.5 percent of the total market capitalization of India.
The EW All Share Index consists of 1,425 companies from 10 sectors and 85 different industries. It will also be used for tracking investment potential in India.
The Chairman of the Institute of Objective Studies (IOS), Dr. Mohammad Manzoor Alam said that the Islamic banking system possesses vast potential and with its help all financial activities can be cleansed of all those defects that are causing socio-economic problems in the society.
Admiring Islamic banking system, Chief Minister of Delhi Sheila Diksit said that there is no reason that this system should not be implemented in India while it has been implemented in China.
Former Chief Justice of India, Justice A.M. Ahmadi said that it would benefit Indian banks and the other financial institutions in planning their businesses in the Gulf countries.
“It is said that to lend money on interest or to receive money on interest is a sin (under Islamic laws), therefore Muslims should avoid such practices,” he said. Justice Ahmadi further said that in order to make this system effective in all respects, it is necessary that it should not be limited to the share business. Provision for Hasanah (benevolence) loans should also be made as it has got much importance in Islam. Not only that the debtors can fulfill their needs through Hasanah loans but also that they can become able to help others.
Union Minister Ali Ashraf Fatimi said that the lives of lakhs of poor people and farmers have been spoiled on account of interest on loans and this is the reason that Islam has strictly prohibited usury. He said that if business is promoted on the lines of Shari’ah directives, financial exploitation of needy people can be uprooted.
The programme was organized by Indo-Arab Economic Co-operation Forum (New Delhi) and Institute of Objective Studies in collaboration with Eastwind Capital Advisors Pvt. Ltd. Ambassadors of several Muslim countries including Jordan, Morocco, Yemen, Iran besides Arab League were present in the programme.